The Federal Housing Administration will be the next financial disaster to fall on the shoulders of American taxpayers.
Whitney Tilson, manager of T2 partners, suggests that the FHA’s portfolio is near $1 Trillion and while we cannot expect all of those mortgages to fail, according to Guy Cecala, publisher of Inside Mortgage Finance, the FHA will end up costing taxpayers $100 billion.
Ultimately, if the FHA fails and needs to be bailed out, as did Fanny Mae and Freddie Mac, the help it will need will come from one source only, the American taxpayer.
The FHA is a federal agency and the guarantees it offers are backed 100 percent by the public coffers.
If we are still reeling from the amount of money we had to pay to keep some of our nation’s financial institutions intact, we should be aware of just how much responsibility we are transferring onto a federal agency which, if it fails, will add another bailout to our tabs.
Taxpayers soon to foot the bill for the FHA's debt
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